How do you find out, as an organization, when your customers are truly enthusiastic? How do you measure the results and determine the right customer centric goals, challenges and targets? In what way do you make the enthusiasm of your customers more tangible for your employees? And how do you stimulate your colleagues to give their best possible performance for the customer, over and over again? There are several customer experience (CX) KPIs which you can measure ‘soft’ aspects like enthusiasm, loyalty and satisfaction. The CX KPI that is most widely used, is the Net Promoter Score (NPS).
Net Promoter Score (NPS)
Net Promoter Score (NPS) is a research method that was developed by Satmetrix, Bain & Company and Fred Reicheld back in 2003. Instead of asking customers to respond to extremely long questionnaires, they invented a method that delivers a wealth of information based on only a few questions. With the NPS method, there is one central question, which addresses the loyalty of the customer. This question is:
‘How likely is it that you would recommend this product/service/company to friends or family?'
The respondent answers this question on a scale of 0 to 10 and then responds to a few follow-up questions linked to the main question, which are intended to explain the deeper reasons behind the score. Based on the score they have given, respondents can be divided into three groups: Detractors, Passives and Promoters. In order to calculate the actual NPS, you take the percentage of Promoters (respondents who rated the question with a 9 or a 10) from which you then deduct the percentage of Detractors (respondents rating 0 to 6). The result is represented as an absolute score, so not as a percentage and will lie between -100 and +100.
NPS and targets (KPIs)
So how do you know what exactly this score between -100 and +100 entails for your organization? You want to make sure that the bar is set high enough for your colleagues and for yourself, but not too high. It is important that the targets in your organization are both realistic and challenging at the same time. Don’t be fooled by benchmark scores you might find online. There are so many factors that can influence the NPS that using an external benchmark might throw you off track.
Research can be a very useful way to determine what your goals and targets should be. When you do so, you’ll have to be very aware of what underlying processes are required to generate an increase in score. When you are working with calculative metrics like NPS, an increase of 10 points per year will be relatively easy when your starting point is -50, but quite complicated when you start at for instance +80.
We would recommend that you first establish a target for your organization as a whole, but that you then translate this to individual NPS targets for employees, departments or functions. When you have an NPS system that allows for these types of individual targets, it becomes much easier to also use the KPI as input for a bonus system, so employees can be rewarded for their customer centric efforts in a fair way.
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